Compulsory purchase powers – Mixed-use development – Section 226(1A) of Town and Country Planning Act 1990 – Respondents granting outline planning permission to appellant and rival party for same site – Resolution to exercise section 226 compulsory purchase powers in favour of rival party on ground that development on other land would be cross-subsidised by development of compulsory purchase order site – Whether cross-subsidy a material consideration under section 226(1A) – Appeal dismissed
The ownership of a potential development site was shared between the appellant, which held the greater part of the land, the interested party, which owned most of the remainder and the respondent council, which were also the local planning authority for the area. Despite early negotiations, the appellant and the interested party could not agree as to which of them should develop the site; both submitted planning applications for a mixed-use development. The respondents granted outline permission for each application, further agreeing in principle that they would, if necessary, use their compulsory purchase powers, under section 226 of the Town and Country Planning Act 1990, to facilitate one of the schemes. They considered that either scheme would bring appreciable planning benefits and improve the social, economic and environmental well-being of the city, as required by section 226(1A).
Since the appellant and the interested party still could not reach agreement, the respondents decided to choose between their respective schemes. By a formal resolution, they approved, in principle, the making of a compulsory purchase order (CPO) to facilitate the interested party’s scheme; they considered that scheme to have the advantage of enabling the development of a second site, owned by the interested party, which it was willing to develop along with the first site but which it considered to be financially unviable to develop on its own.
The claimant sought judicial review of the defendants’ decision on the grounds that, inter alia, the advantage of securing the development of the second site was an immaterial consideration, which the respondents should not have taken into account when deciding in whose favour to exercise the compulsory purchase power: see [2009] EWHC 134 (Admin); [2009] PLSCS 38. Dismissing the claim, the judge held that the benefits of the development of the second site were not benefits falling within section 226(1A) of the 1990 Act, but were material considerations of which the respondents could properly take account when deciding whether to make a CPO. The appellant appealed.
Held: The appeal was dismissed.
The benefits of developing the second site fell for consideration under section 226(1A) when deciding whether to make a CPO under section 226(1)(a). Although section 226(1)(a) required an authority to be satisfied that the CPO would facilitate the development of the CPO site, section 226(1A) required them to look beyond the benefits that would accrue on the CPO site and to consider whether, and to what extent, its redevelopment was likely to bring about economical, social or environmental “well-being” benefits to a wider area. Section 226(1A) was in form a limitation, stating that the authority “must not” exercise the power “unless” it would contribute to the achievement of the stated objects. In practice, however, it broadened the issues that had to be taken into account by a local authority when deciding whether to make a CPO. The section was concerned with all the consequences that would flow from the redevelopment of the CPO site and was not prescriptive as how that redevelopment might contribute to wider benefits. One possible way was that the redevelopment of the CPO site might act as a catalyst for the development or redevelopment of some other site or sites within the authority’s area, either directly or indirectly.
In the instant case, the respondents had been satisfied that facilitating the interested party’s scheme by making a CPO would act as the catalyst for the redevelopment of the second site in a manner that would contribute to the economic, social and environmental well-being of their area. The potential financial implications of redeveloping a CPO site, including the possibility of that development cross-subsidising another highly desirable scheme, could be a material consideration when considering the extent to which the redevelopment would contribute to wider “well-being” benefits. Financial viability and economic well-being were significant factors in the CPO context. Authorities concerning the lawfulness of planning conditions to secure off-site benefits, and which off-site benefits might fairly “relate” to the grant of planning permission, did not directly apply to the power to make CPOs under section 226 of the 1990 Act in the light of the different statutory language: R v Plymouth City Council, ex parte Plymouth & South Devon Co-operative Society Ltd [1993] 2 EGLR 206; [1993] 36 EG 135 and Tesco Stores Ltd v Secretary of State for the Environment [1995] 2 EGLR 147; [1995] 27 EG 154 distinguished, R v Westminster City Council, ex parte Monahan [1990] 1 PLR 36 considered. Accordingly, the respondents had been entitled to have regard, under section 226(1A), to the proposed cross-subsidy of the second development and to decide in favour of facilitating the interested party’s scheme.
Christopher Lockhart–Mummery QC and David Forsdick (instructed by CMS Cameron McKenna LLP) appeared for the appellant; Neil King QC and Guy Williams (instructed by Wragge & Co, of Birmingham) appeared for the respondents; Christopher Katkowski QC and Scott Lyness (instructed by Ashurst LLP) appeared for the interested party.
Sally Dobson, barrister
